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Callaway v. Denone, LLC

United States District Court, N.D. Ohio

June 26, 2019

BARBARA CALLAWAY, on behalf of herself and all others similarly situated, Plaintiffs,
DENONE LLC, et al., Defendants.



         Plaintiffs, servers at Northern Ohio Denny's restaurants, bring this suit against Defendants alleging Fair Labor Standards Act (“FLSA”) violations. On March 8, 2019, the Court conditionally certified the suit as a collective action. Defendants now move to decertify the collective action.[1]

         For the following reasons, the Court DENIES Defendants' motion.

         I. Background

         Defendants operate a Northern Ohio Denny's restaurant chain. Plaintiffs work or formerly worked as servers at Defendants' restaurants. They claim that they Defendants paid them a sub-minimum wage in violation of the FLSA. They also argue that the FLSA's tip-credit provision, which allows an employer to partially credit employee tips towards its minimum-wage obligations, does not apply.

         Plaintiffs allege three categories of FLSA violations: first, they claim that Defendants did not notify them that they were being paid under to the FLSA's tip-credit provisions. Second, they allege that they performed excessive nontipped side work, preventing Defendant from using the FLSA's tip-credit provision.[2] Third, they allege that Defendants unlawfully used their tip-credit pay rate to calculate their overtime pay.

         On March 7, 2019, the Court conditionally certified a collective action of:

All individuals who worked at any time during the past three years at any restaurant owned or operated by Defendants in the job position of server and who were paid for their work on an hourly basis according to the tip credit provisions of the FLSA, (i.e. an hourly rate less than the applicable minimum wage, excluding tips).[3]

         Defendants now move to decertify the collective action.

         II. Discussion

         Employees may bring a collective action to enforce the Fair Labor Standards Act “on behalf of . . . themselves and other employees similarly situated.”[4] To determine whether the employees are similarly situated, the Court considers “(1) the factual and employment settings of the individual[] plaintiffs, (2) the different defenses to which the plaintiffs may be subject, and (3) the degree of fairness and procedural impact of certifying the action as a collective action.”[5] The “heart of the matter” is whether the collective plaintiffs can bring their claims “based on representative, rather than personal, evidence.”[6] Plaintiffs shoulder the burden of showing they are similarly situated.[7]

         Certification typically proceeds in two stages. At the first “notice” stage, the plaintiff must make a “modest factual showing” that their position is like the positions held by putative collective members.[8] At this second stage, following discovery, “trial courts examine more closely the question of whether particular members of the class are, in fact, similarly situated.”[9]

         A. Plaintiffs' Factual and Employment Settings [10]

         Plaintiffs, who all held the same job title, have submitted declarations stating that Defendants regularly required them to perform substantial amounts of nontipped side work.[11] The declarations from servers at different locations state working conditions are similar across Defendant-owned restaurants. Additionally, Plaintiffs submit a Defendant notice recommending that servers pick up shifts at neighboring Denny's restaurants, suggesting that job duties were similar across locations.[12]

         Further, though Plaintiffs are not required to demonstrate that their claims flow from a single FLSA-violating policy, [13] they provide substantial evidence that Defendants had a standard policy requiring Plaintiffs perform nontipped side work each shift. Defendants' training materials explicitly detail how servers should be trained to perform the side work described in the complaint.[14] They also include detailed side work maps stating that “all side work must be completed before leaving your shift . . . and checked by management team.”[15] Opt-in Plaintiffs testified in their depositions that they consulted these side work checklists when performing the work on shift.[16]

         Considering Defendants' own training materials and the Plaintiffs' consistent testimony, Defendants' contention that “DenOne's restaurants do not use a standardized checklist or form for assigning side work to each server on a regular basis, and DenOne does not have a policy regarding assigning side work to servers”[17] is not believed.

         Defendants offer two arguments in support of decertification. Defendants' first argument is that the opt-in Plaintiffs' deposition testimony “refute[s] many, if not all, of the allegations in the complaint, ” because their disposition testimony differed “as to what each of them considered to be work for which they should be paid the tip-credit minimum wage.”[18] This argument is completely irrelevant. FLSA liability and collective action certification do not depend on individual employees' personal views about how they should be compensated.

         Defendants also argue that Plaintiffs are not similarly situated because the amount of nontipped side work varied. The deposed opt-in Plaintiffs generally agreed that the quantity of side work varied depending on the manager, shift, location, day, staffing, and restaurant busyness.[19] Plaintiffs argue that these variations do ...

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